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Why HTML5 won’t take the wind out of Apple’s sails

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Apple’s (s aapl) operating profit growth could take a 30 percent hit by 2015, owing to the rise of HTML5, according to Bernstein Research analyst Toni Sacconaghi Jr. Forrester Research agrees that HTML5 adoption could also affect Apple’s ability to generate revenue from native apps, according to a PCWorld article on Monday. But industry watchers should be wary of underestimating the continued appeal of the native iOS app for two big reasons.

1. The limits of native apps can quickly change

Part of the argument behind the ability of HTML5 to replace native apps on devices like the iPad and iPhone is that the web tech is catching up in terms of features to iOS software. That may be true, but it will likely never actually reach par with native apps, because Apple is in the driver’s seat when it comes to what third-party software can and can’t do on its devices. Every new major iOS update brings new APIs for developers to play with, and each new hardware generation puts new connectivity options, radios and other hardware features at their disposal. For example, iOS 5 introduces 1,500 new APIs for developers to leverage, including access to iCloud Storage, Newsstand and Twitter.

Only Apple determines what its software can and can’t do and what kind of hardware it gets to work with; with HTML5, standards are set based on what all browsers will support, which requires more compromise. Also, HTML5 will necessarily have far more limited access to the full capabilities of iOS hardware, even though Apple has made some improvements on that side of things, like allowing mobile Safari to tap into larger portions of local device memory and geolocation services. But even if it looks like HTML5 is “catching up” to what’s possible with native apps, it will likely never actually match them, as Apple’s mobile tech evolves and it provides more APIs to native developers through the iOS SDK.

2. Apps have only just begun beating the mobile web

Mobile apps have only just recently started to be more popular than mobile websites for Internet access from smartphones and tablet devices. It’s a trend that has been in motion since the advent of app stores, and there’s little indication that it’s slowing or turning around, despite recent efforts by players like Vudu,(s wmt) Amazon (s amzn) and the Financial Times to create HTML5 web apps instead of going through Apple’s App Store.

It’s obvious that companies would prefer HTML5 over native apps, since web-based products would allow them to cut out Apple as a middleman and take in a larger percent of any profits, as well as make it easier for them to develop once for many platforms. But if studies around consumer mobile desires are any indication, the will on the user end of the spectrum just isn’t there to support an HTML5 mass migration. That may change as more HTML5 products come to market, but the advantages of native apps are still things consumers want: dependable offline access, device-specific interfaces and unfettered access to special hardware and software features.

I think Apple is poised to make more, not less, money from apps in the next few years, and I don’t think HTML5 is really in any position to cut into those profits yet.

23 Responses to “Why HTML5 won’t take the wind out of Apple’s sails”

  1. Kony Appfan

    It’s apparent that HTML5 and native applications each offer companies with unique advantages. The question is why companies still feel the need to develop for only one of these channels. Since consumers use each channel differently, companies should be developing for both to ensure they are creating a comprehensive offering that maximizes the potential of their mobile strategy. As the article notes, one reason that organizations are choosing to develop mobile websites over native applications is because of the perceived cost of developing the application across multiple platforms. One way to overcome this is to utilize a single application definition, which allows companies to make their offering available across numerous devices and channels at once without sacrificing any device’s powerful native capabilities. This allows companies to provide users across various devices and channels with a unique user experience, resulting in a comprehensive offering that will increase adoption rates and maximize ROI.

    John Stewart

  2. Why HTML 5 won’t affect Apple.

    Because Apple won’t implement it, because it wasn’t made or developed by apple. And Apple Fans don’t fucking care. These are the same people who will buy the iPhone 5, even though it would be on par with phones that have been released 6 months ago.

  3. Hamranhansenhansen

    How stupid of an Apple analyst do these guys have to be not to know:

    • Apple is the biggest promoter of HTML5 — they co-wrote the spec, they created the reference browser, they ported it to ARM and made HTML5 standard on mobiles by sharing that code with all mobile makers, so that if you run an HTML5 app today, you are likely to be running it in Apple’s HTML5 decoder, or that Apple was the first PC vendor to ship an HTML5 browser, and iOS is the best HTML5 app platform

    • a key feature of App Store is that the apps do MORE than HTML5 apps — if they did not, App Store would have no reason to exist … but you can’t do iMovie on the Web, you can’t do music and audio

    • that Apple only makes 1% on app sales — in other words, less than a penny on a 99 cent app, the other 29% they take is overhead?

    The concern trolling for Apple lately is just sad. There is nothing bad that can be said about Apple’s position. They are in a completely unprecedented position of leadership in the industry even for them.

    HTML5 is a level playing field. Apple has no problem competing on a level playing field.

  4. Roy Smith

    Simply put, it is unacceptable for one company to have absolute control over what can and can’t be available on a platform as important as mobile. It’s also unacceptable for that same company to exact a 30% tariff on all commerce that happens on the platform.

    Android is merely a different flavor of the same pie, albeit with less censorship, but the same tariff.

    HTML5 is the only viable, open alternative to power the Internet’s imminent move to mobile. There are many companies working hard on tools and services for HTML5 that will give it equal footing as a mobile platform competing with iOS and Android.

    • What is not fair? Apple created the App Market, they manage the resources, they test the apps and give you process to collect the sale. How is that not different then any store? Most retail markup is 10% to 50%. The Fact that Apple takes 30% is not bad. How much more would it cost small developers creating their own Market, manage all the resources, the payment systems, taxes, technical support and legal claims against them.
      Apple might be heavy handed at times, but they manage a stable and reliable Market place to IOS apps.

    • Hamranhansenhansen

      You are misinformed.

      iOS runs both native App Store apps and HTML5 Web apps. Both kinds of apps can be installed locally on an iOS device. Apple has no control over which HTML5 Web apps you choose to run, and you can install them from any server anywhere in the world. That is because Web apps run in a sandbox, they don’t have to touch the hardware. App Store apps are managed in order to provide an alternative to unmanaged Web apps, and also because they are native C/C++ apps which run “on the metal,” and therefore require auditing to run safely and 100% malware-free. Native apps have the key to your house, you can’t just let an unaudited app run on there.

      Which do you think is the bigger evil: auditing native apps to make sure they are safe and achieving a 100% malware-free native application platform, or what Microsoft has on Windows, a plague of malware that has cost their users billions of dollars?

      People who are buying iOS devices appreciate the features of one or the other app platform or both. You can use an iPad and never use App Store and still have access to hundreds of thousands of apps. Or you can use the hell out of App Store. Your choice. Same as the choice either to buy or not buy an iPad.

      HTML5 apps were running on iOS 1 year before App Store even launched. The idea that you can’t run whatever you want on your iPhone is crazy. It comes with like 20 apps and then you are on your own. Nothing gets on there that you don’t put on there yourself. There are hundreds of thousands of either kind of app. Use what you like.

  5. Ouriel Ohayon

    html5 apps will remove the necessity to download elementary, simple apps. Most of them are free and sometimes paid. This is why this will not alter apple’s position or even the android market. Html5 will not be able to replace the comfort of sophisticated app

    This being said take a look at and you ll understand that once you used this HTML5 app from your mobile device, you would never pay 0.99 for a currency converter app

  6. Idon't Know

    First of all these numbers are made up. Nobody has any idea if this will happen. Secondly Apple supports HTML 5 and does not seem to be at all worried about it impacting app sales. Their biggest reason for supporting HTML 5 is to get rid of Flash but they know the HTML 5 or ANY web based app will not compete well with a actual app.

  7. Laughing_Boy48

    Apple’s App Store brings in about $300 to $400 million dollars a year. By next year, Apple’s cash reserve will grow about $7 to 8 billion per quarter. I honestly don’t think losing some of that 30% App Store fee is going to hurt Apple at all. Apple has already tried to promote the use of HTML5 on its devices and now this jackass is claiming Apple is going to suffer the most loss of all smartphone platforms. Apple makes most of its money selling hardware and nothing is going to hurt Apple as long as consumers continue to buy Apple products no matter what drives the sales, be it native apps or HTML5 apps.

  8. I think you’re completely right – and I don’t even think you have to argue the point. Simply ask yourself this question: If HTML5 was a threat to Apple income, Apple would never have taken such a huge stake on making their devices devoid of flash gambling on the advent of exactly HTML5…

  9. Wasn’t this Apple’s intent in the first place? Developers were supposed to write HTML5 web apps to run in Safari. Everybody raised a stink and Apple rolled out a way to write apps with XCode and subsequently created the cash cow that is the app store. So now we come full cycle.

    • Idon't Know

      No. When the iPhone was first introduced you could build web apps for it but HTML 5 was not really more than a concept. Apple always said and always intended there would be apps for the iPhone in later versions of the hardware and iOS.

      • Hamranhansenhansen

        Yes, the apps you could write for the original iPhone were HTML5.

        HTML5 was started in 2004 and adopted by W3C in January 2007, 6 months before the original iPhone shipped. A key feature of iPhone Web app development was you had the HTML5 canvas to draw an interface on.

        HTML5 is just a description of modern HTML, it describes what the browsers do, not some lofty future academic goal that we may never achieve. It is not as new as you think, and what little is new is backwards-compatible. The fact that the original iPhone supported less of the HTML5 spec than today’s iPhone did not stop the apps from running or stop them from being HTML5.

        The original iPhone had native apps built with the same tools Apple released a year later. Yes, definitely they were always going to do that. But they were always going to have HTML5 apps as well. They did not make WebKit for OS X so they could leave it out.

  10. Jason Thibeault

    I have to say you are completely missing the point. Like all the news stories lately about this, it’s an “either/or” discussion. The true opportunity is in the middle-ground provided in development environments like Titanium. This enables the developer to utilize powerful, standardized technologies (like HTML 5 + js + css) yet within a native app wrapper giving them total access to the bevy of system-level APIs and functionality. Furthermore, this provides the developer the ability to create truly cross-platform experiences: the same HTML/js/css code in my iOS/Android app can also be used on the web. But the question around native vs. HTML 5 is also about app functionality. Why in the world would an application like the Financial Times need access to core system level features? And if it doesn’t, what’s the point of building a native app? What this whole discussion around native vs. HTML 5 apps has raised is this issue: that your application MAY NOT need to be native. And, as such, that has cracked the walled-garden of Apple’s AppStore because it means developers have a choice.


    • Hamranhansenhansen

      There is no walled garden. That is absurd in the extreme. Apple not only put HTML5 in iOS, they did 5 years of WebKit work first and co-writing of HTML5 in order to get it on there. They were the ones who ported the Web to ARM, remember? HTML5 is the most open API ever created. No device that runs HTML5 can be described as a walled garden. Your app can install locally from any server in the world.

      App Store is managed 1) as an anti-malware initiative, the only successful one ever, resulting in a 100% malware-free native app platform, and 2) as an alternative to the unmanaged Web, which all users already have access to. These are great reasons. Arguing with success is for losers.

      It is fine to create an HTML5 app and deploy on the Web and the Java platforms. App Store, though, offers you native C/C++ and the opportunity to make a much richer app than HTML5. Since user’s baseline expectations are set by the Web, App Store enables you to wow them and that is what people are willing to pay for in an app. So if you give your HTML5 app to an Xcode coder and let him use it as a mock-up and then build on it from there, the money you pay that coder will come back to you 10 times over or more in increased sales because your app will be that much better.

      In other words, native iOS app development pays for itself. No reason to avoid it if you want to be in App Store. If an app platform doesn’t pay for itself, then by all means, wrap a Web app.

  11. Martin Turner

    It’s a peculiar thesis, given that the rise of the internet, and even the rise of cloud applications, has done little to dent the sales of high-priced software for desktops and laptops. An app resides on your device whether or not you have a viable 3G, Edge or Wireless connection. Naturally apps such as BBC News which have no other function than downloading content from the web will lose ground to HTML5 — but remember that the BBC News app only exists because the current BBC News website exploits Flash and is therefore not fully iOS compatible.

    Altogether, Bernstein’s research and Forrester sounds like another ‘oh no, the future is coming — quick, hide!’ response.

  12. I have to add that, the recent obsession with html 5 comes from the wrong perspective.

    I keep hearing how much easier is to develop web based apps than native ones, one size fits all, all of that.

    But they are talking from the viewpoint of the developer, not the consumer, they are offering what is good for them, not for me. That’s the reason why Apple is so succesful, they put the consumer first, not look what’s better for them and then force consumers to follow.

  13. Andrei Timoshenko

    Most importantly, there is no reason for an application to be purely server-side, even if it can recreate identical functionality. Purely server-side applications are less robust (they depend on the functioning of server, client, and network, and any failures become conjoint with other failures – so large ‘blackouts’ become possible), and their main advantage is the optimisation of the use of scarce resources. Naturally, we are moving into a time of an overabundance of computing resources – a supercomputer in every doorknob – and not one of scarcity.

    Of course, using apps over HTML does not mean forsaking connectedness, it just means that connectedness will be more distributed and P2P, rather than centralised and client-server. Redundant meshes are more robust, more flexible and more difficult to monopolise than optimised chains are… It’s the same reason why electricity microgrids are such an excelent idea.

    Any data, therefore, should first be processed and stored as ‘close’ as possible to the device the user is currently interacting with, then predictively pushed out to devices the user may soon switch to, then pulled in for situations not previously predicted, and only as a fallback option accessed from a backup on some centralised server.

    We need the Internet, but more through inter-connected meshes of devices, apps, and APIs, than through browsers, servers, and HTML.

    • Hamranhansenhansen

      HTML5 is not server-side, it runs on the client, same as native apps. The server is optional in HTML5, you are not supposed to rely on it being there. The first time the user uses the app, it is installed locally, and from then on, only pulls updates from the server.

      So what you have in iOS is just 2 kinds of local app: native App Store and HTML5 Web app. They are like a yin yang, the 2 together give you a complete universe of apps. The native apps are iOS only, while the Web apps are universal. Native apps are managed, Web apps are open. Native apps are controlled by Apple, Web apps by W3C. Native apps have a commercial installer (App Store) and Web apps have a non-commercial installer (World Wide Web.) Native apps have Mac-like features (animation, multichannel audio, video, ease of use, refinement) and Web apps have Web-like features (minimalist audio, video, animation.)

      Whatever project a developer is working on, one or the other type of app will be ideal, either HTML5 Web app or native App Store. But in both cases, you are making a local app.

  14. Carniphage

    App store revenue is a tiny fraction of Apple’s profits.
    Even if 100% of all apps went to HTML5 – it would not make a substantial difference to Apple’s revenues.
    In truth, nothing like that is going to happen. Developers understand that being inside the App store brings many more paying customers than being outside it. 70% of a lot is better than 100% of not very much.